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Igoryamba
2 years ago
8

Suppose that $2000 is loaned at a rate of 11.5% , compounded semiannually. assuming that no payments are made, find the amount o

wed after 5 years. do not round any intermediate computations, and round your answer to the nearest cent.
Business
1 answer:
Zolol [24]2 years ago
6 0

This problem is solved by using the compound interest formula:
 A=P(1+(I/period))^(number of periods)
 Where A = amount accumulated and P = amount loaned and I = Interest 
 A = ? P = $2, 000, I = 0.115, Period = 2 (semi annually) Number of period = 2
*7 (I. e paid twice over a 7 yrs span) 
 So we have 
 A = 2000 ( 1 + 0.115/2)^(14)
 A = 2000 ( 1 + 0.0575)^(14)
 A = 2000 (1.0575)^(14)
 A = 2000 (2.1873851765154) = 4374.77035
 So we have 4374.80 to the nearest cent.
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